Democratic change of eurozone is « critical »

By Craig James Willy, dpa*

Collective decision-making in the eurozone on national deficits and reforms? Pervenche Berès, French MEP, hopes the debate on improving the currency bloc could lead to EU institutions deciding policies. She argues much can be done without changing the Treaties.

Brussels (dpa Insight) – French Socialist MEP Pervenche Berès wants to radically change economic policymaking in the eurozone. Instead of only following pre-set deficit rules, the politician wants the currency bloc to debate and decide as a whole on what fiscal and economic policies should be followed. « The democratic dimension is a very critical one, » she told dpa Insight EU. « We could go towards a procedure which would be less complex, simpler, more democratic and with greater ownership at both European and national level. »

To achieve this, Berès wants to politicise the so-called ‘European Semester’ policy cycle. Every year in June the European Commission presents its non-binding recommendations for EU countries and the eurozone, to be later adopted en bloc by the national governments in Council. The Commission then monitors implementation, with possible sanctions in the field of budget deficits.

Berès wants to use this mechanism for the eurozone to debate and decide its policy mix as a whole, possibly through co-decision between the European Parliament and Council. She argues that the recommendations should be published earlier in March and after approval made binding for the eurozone. « Then you would have an ex ante discussion on the fiscal stance of the eurozone and this is for me what is really lacking, » she said.

The Socialist argues this would create a more flexible policymaking process on the US model, in contrast to the eurozone’s current reliance on pre-set budget rules. « It is not very proactive or reactive, it doesn’t allow you to adapt to new forecasts, » she said. « You need to be able to determine your policy mix. »

Berès is a longtime Brussels insider, having been an MEP since 1994, and presided the influential Economic and Monetary Affairs Committee (ECON) between 2004 and 2009, of which she is still a member.

The biggest problem is that attempts to deepen the eurozone by transferring more powers and sharing more risks at EU level would eventually require reform of the European Treaties. Berès argues that MEPs’ involvement could be achieved without such Treaty change. « You can also do it with an interinstitutional agreement, » she said. Reforming the Treaties requires the approval of all 28 countries and possible referenda, a difficult prospect in light of many national governments’ unpopularity, notably in Beres’s native France.

« Slow movement » in Council

Berès has included some of these ideas in a draft report in the Economic and Monetary Affairs Committee (ECON), which would give the Parliament’s non-binding view of how to reform the eurozone. European heads of state and government are set to discuss the issue at a summit in June, which could decide on the issues and a calendar to improve the currency union.

The French MEP is disappointed at the pace of discussion among national governments. « I’m not saying we will do everything overnight but we need to find out where want to go, » she said. « But looking at the slow movement in the European Council on this topic I don’t know what would happen in the end. »

EU leaders will notably be discussing a new version of the so-called « Four Presidents’ Report » on deepening the currency union – so-called because it was co-signed by the presidents of the European Coucil, the European Central Bank, the Commission and the Eurogroup. The first version was presented by former European Council president Herman Van Rompuy in June 2012. Beres argues the document should become a « Five Presidents’ Report » with the association of the president of the European Parliament, currently Martin Schulz.

Many of Van Rompuy’s recommendations, such as the creation of a single resolution mechanism, have been adopted, while others, such as a eurozone budget and binding reform contracts with member states, have not.

New rules, crisis management boosted euroscepticism

Berès expressed disappointment with the implementation of the eurozone’s new rules so far, arguing that it is too mechanistic, alienating public opinion. « We hoped this macroeconomic imbalance procedure would be a way to have the discussion on the situation of the economic picture of the eurozone as a whole, with divergences, spillover effects and so on, » she said. « In fact this procedure has ended up being about bilateral discussion between the Commission and the different member states on structural reforms. »

The Socialist laments that pressuring member states to reform has increase anti-EU sentiment. « To have someone from outside imposing policies actually promotes euroscepticism, » she said. « I strongly believe this is what happened with the Troika. »

Berès argues that eurozone leaders’ method of crisis management, with national governments often taking late-night, caffeine-fuelled decisions by consensus, has led to poor outcomes. « We need to complete the economic and monetary union because it is necessary, for example, to tackle the situation we are now facing with Greece, » she said. « Obviously we didn’t, and because we always postpone it, we have to face emergency crises. »

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* Deutsche Presse-Agentur, en abrégé : dpa, en minuscules) est la principale agence de presse de langue allemande